The current economic landscape urgently requires decisions that reactivate growth, strengthen investment, and restore dynamism to an economy that has shown a downward trend for several years. In this context, any modification directly affecting the corporate tax rate must be analyzed not only as a tax adjustment, but as a strategic decision.
One of the main issues with the current system is that it incentivizes tax-driven decisions over productive ones. When the tax burden becomes significant, companies tend to prioritize tax optimization over productivity. Furthermore, when combined with increasing compliance costs and an environment that may, in practice, encourage tax evasion, the situation becomes even more complex.
However, that is not the only concern. The current tax structure also affects the country’s international competitiveness. Today, investing in Chile is more expensive than in other economies, and if sufficient competitive advantages are not demonstrated, the outcome is clear: investment is discouraged.
The lag in fixed capital formation is a clear sign of this phenomenon. The lack of significant new infrastructure—roads, ports, hospitals, or production plants—reflects a weakened economy where investment is not returning with the necessary strength.
In this context, reducing the corporate tax rate aims to rebalance the system: less tax pressure to enable greater investment, higher production, and, in the medium term, increased tax revenue, not through higher rates, but through greater economic volume.
So the question becomes: is it better to tax heavily a stagnant economy or to tax less in a growing one? Historical evidence in the country shows that the latter has been more effective in generating employment, dynamism, and sustained growth.
Likewise, when a significant portion of income is channeled to the State without an efficient return in investment or quality of spending, a distortion arises that affects equity. Conversely, when companies retain more resources, they tend to reinvest, expand operations, improve working conditions, and create new opportunities.
The current system, with multiple regimes and differences in taxation, presents a level of complexity that hinders both compliance and enforcement. This fragmentation also breaks horizontal equity, creating unequal treatment among taxpayers.
From a more technical perspective, factors such as the elasticity of corporate income reinforce the need to review the current framework. This is not an ideological debate, but rather an analysis grounded in decades of economic thought, supported by mathematical, sociological, and structural foundations.
The reform is essential for the country, as a lower corporate tax rate aligned with international standards would help restore competitiveness, refocus efforts on productivity, and facilitate private reinvestment.
In an economy that needs to grow, maintaining a system that makes investment more expensive and distorts productive decisions is not sustainable. The goal is not only to collect revenue, but to do so with a focus on growth, investment, and a more effective distribution of opportunities across the country.
By @Claudia Valdés Muñoz, General Manager of BBSC
www.bbsc.cl contacto@bbsc.cl +56 9 3962 7727
- Internal Revenue Service Chile (SII): https://www.sii.cl
- Ministry of Finance Chile: https://www.hacienda.cl
- Central Bank of Chile: https://www.bcentral.cl
- OECD (tax comparison): https://www.oecd.org/tax
- ECLAC (investment and development): https://www.cepal.org
